Social Security Administration announces 3.6% cost-of-living adjustment for 2027
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The Social Security cost-of-living adjustment will be 3.6% in 2027, the Social Security Administration said on Wednesday.
The cost-of-living adjustment, or COLA, provides an annual inflation adjustment to both Social Security and Supplemental Security Income, or SSI, benefits.
Social Security retirement benefits will increase by $75 per month on average, the agency said.
"Social Security will implement this cost-of-living adjustment for 76 million Americans, giving them greater financial stability," Social Security Commissioner Frank Bisignano said in a statement.
Around 72 million Social Security recipients will see the benefit increases in January, according to SSA. About 7.3 million SSI beneficiaries will receive higher payments starting Dec. 31, the agency said.
The 3.6% COLA for 2027 is in line with Social Security experts' projections , which last month forecast an increase of 3.5% to 3.6%.
The 3.6% COLA for 2027 is the largest increase to benefits since 2023. That year, beneficiaries received an 8.7% benefit boost — the highest in four decades — in response to rising inflation.
New government inflation data released on Wednesday shows consumer price increases are accelerating. The consumer price index rose 3.7% over the past 12 months, as gas prices jumped.
About 40% of Social Security beneficiaries ages 65 and over rely on the program for at least half of their income, according to the AARP .
A recent AARP survey found 76% of respondents said a 3.5% COLA would not be enough .
The Social Security COLA is "critically important" because it helps millions of Americans cover rising everyday costs, including groceries, routine bills and health care, AARP CEO Myechia Minter-Jordan said in a statement.
"There's a lot on the line financially right now for older Americans: one in five have no retirement savings, and more people feel financially insecure this year than last," Minter-Jordan said.
Beneficiaries can multiply their current monthly benefit amount by 3.6%, or 0.036, to estimate the increase to their checks for 2027.
However, keep in mind that increases to Medicare Part B or Part D premiums for 2027 — which may be deducted directly from benefit checks — can affect the size of beneficiaries' monthly payments.
Standard monthly premiums for Medicare Part B are projected to be $209.50 in 2027 , up from $202.90 in 2026, according to a report from Medicare trustees. Some beneficiaries may pay extra surcharges, known as Income-Related Monthly Adjustment Amounts, or IRMAAs, if they have higher incomes. Medicare Part B covers medically necessary and preventive services.
Meanwhile, Medicare Part D prescription drug plans may see modest premium increases in 2027, according to an analysis by KFF , a nonpartisan health policy research group.
The Social Security Administration will send beneficiaries notices about the COLA changes. The notices will include specific information about their 2027 benefits, including exact payment dates and dollar amounts, as well as any deductions.
Individuals who have created online My Social Security accounts can access that information starting in late November, according to the agency. Beneficiaries without an online account who want to see their COLA notice online must create an account and opt into paperless notices by Nov. 18.
Beneficiaries who have not signed up to receive online notices will receive mailed COLA statements in December. Those individuals should make sure the address the agency has on file is up to date, according to SSA.
Medicare premium amounts for 2027 will also be available online through the My Social Security message center starting in late November, the agency said.
The COLA is based on the percentage increase of one specific government inflation measure — the Consumer Price Index for Urban Wage Earners and Clerical Workers, or CPI-W — from the third quarter of the previous year to the third quarter of the current year.
The CPI-W is a subset of the consumer price index that tracks the average change in prices for goods and services purchased by urban households.
The CPI-W rose 3.9% over the past 12 months, according to September data the Bureau of Labor Statistics released on Wednesday.
Policymakers and advocates have proposed alternatives to the CPI-W for calculating the annual COLA. One alternative is the chained CPI, an index that accounts for changes in buying habits as prices rise. However, a recent AARP analysis found that switching to that measure would "substantially lower benefits over time."
Others have proposed using the Consumer Price Index for the Elderly, or CPI-E, an experimental index that tracks spending for individuals ages 62 and over. However, some experts say the CPI-E does not necessarily grow much faster than the current measure used to calculate benefit increases.
Switching to a different COLA measure is among the changes lawmakers may consider in upcoming Social Security reform.
"Social Security's future is on the ballot this November, and that includes the size of annual COLA adjustments," said Nancy Altman, president of Social Security Works, an advocacy group focused on expanding Social Security.
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